Financial Contrast: Federal Signal (NYSE:FSS) & Shanghai Industrial (OTCMKTS:SGHIY)

Shanghai Industrial (OTCMKTS:SGHIY) and Federal Signal (NYSE:FSS) are both multi-sector conglomerates companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Insider & Institutional Ownership

92.7% of Federal Signal shares are held by institutional investors. 3.3% of Federal Signal shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Shanghai Industrial and Federal Signal, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Shanghai Industrial	0	0	0	0	0.00
Federal Signal	0	4	2	0	2.33

Federal Signal has a consensus price target of $123.00, indicating a potential upside of 9.87%. Given Federal Signal’s stronger consensus rating and higher possible upside, analysts clearly believe Federal Signal is more favorable than Shanghai Industrial.

Earnings and Valuation

This table compares Shanghai Industrial and Federal Signal”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Shanghai Industrial	$3.71 billion	0.50	$359.94 million	N/A	N/A
Federal Signal	$1.86 billion	3.66	$216.30 million	$3.83	29.23

Shanghai Industrial has higher revenue and earnings than Federal Signal.

Volatility & Risk

Shanghai Industrial has a beta of 0.11, suggesting that its share price is 89% less volatile than the S&P 500. Comparatively, Federal Signal has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.

Profitability

This table compares Shanghai Industrial and Federal Signal’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Shanghai Industrial	N/A	N/A	N/A
Federal Signal	11.47%	19.50%	12.93%

Dividends

Shanghai Industrial pays an annual dividend of $1.04 per share and has a dividend yield of 6.1%. Federal Signal pays an annual dividend of $0.56 per share and has a dividend yield of 0.5%. Federal Signal pays out 14.6% of its earnings in the form of a dividend. Federal Signal has increased its dividend for 3 consecutive years.

Summary

Federal Signal beats Shanghai Industrial on 11 of the 15 factors compared between the two stocks.

About Shanghai Industrial

Shanghai Industrial Holdings Limited, an investment holding company, engages in the infrastructure and environmental protection, real estate, consumer products, and comprehensive healthcare operations businesses in Hong Kong, China, rest of Asia, and internationally. The company invests in toll road projects and water services/clean energy businesses. It engages in the property development and investment activities, as well as operates hotel. In addition, the company manufactures and sells cigarettes, packaging materials, and printed products; and pharmaceutical and healthcare products. Further, the company involved in the raw materials sourcing business; provision of distribution and supply chain solutions services; and operation and franchise of a network of retail pharmacies. The company was incorporated in 1996 and is based in Wan Chai, Hong Kong. Shanghai Industrial Holdings Limited operates as a subsidiary of Shanghai Industrial Investment (Holding) Co., Ltd.

About Federal Signal

Federal Signal Corp. engages in the design and manufacture of products and integrated solutions for municipal, governmental, industrial, and commercial customers. It operates through the Environmental Solutions Group and Safety and Security Systems Group segments. The Environment Solutions Group segment is involved in the manufacture and supply of street sweeper vehicles, sewer cleaners, vacuum loader trucks, hydro-excavation trucks, and water blasting equipment. The Safety and Security Systems Group segment offers comprehensive systems and products that law enforcement, fire rescue, emergency medical services, campuses, military facilities, and industrial sites use to protect people and property. The company was founded in 1901 and is headquartered in Oak Brook, IL.